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Italy's political deadlock could soon be over after the anti-establishment 5-Star Movement and the far-right League said they had made progress towards forming a government.

League leader Matteo Salvini and 5-Star chief Luigi Di Maio said they had made significant steps on the composition of a government and who will be prime minister.

Both parties are hostile to European Union although 5-Star says it won't hold a referendum on membership of the bloc - a move which pleased Antonio Tajani, president of the European Parliament.

"Going out from Europe makes no sense," he said. "It makes no sense to leave the European currency either. It would be something masochistic and I do believe the overwhelming majority of italians care about Italy and Europe too."

Both parties also want to renegotiate the EU's fiscal rules to allow Italy to spend more while the League still calls the euro a "flawed currency" and wants to exit it as soon as is politically feasible.

More than 600,000 migrants have reached Italian shores over the past four years. Not being able reduce this number could also represent a huge political risk for 5 Star and the League